Glide-path portfolios for CPF attract 25 proposals from interested offerors

[SINGAPORE] Competition to offer glide-path portfolios is keen as several parties, including large asset managers and financial institutions, are understood to have submitted proposals to the Central Provident Fund (CPF).

The CPF Board said its call for applications from solutions providers attracted “meaningful industry interest”, with 25 proposals by the submission deadline of Jul 24.

The Business Times understands that interested parties are free to collaborate with others to offer solutions for the “new investment scheme” (NIS), as it is currently generically called. It is expected to launch in 2028.

Proposals will be evaluated by Morningstar, an independent investment consultant appointed by the CPF Board. To simplify choices, two to three product providers are likely to be chosen, which will be announced in the first half of 2027.

In response to questions, a CPF Board spokesperson said the selection of solution providers “will follow a rigorous evaluation process covering areas such as investment strategy and process, investor journey, investment team quality and capability, and track record”.

The spokesperson said CPF has been “progressively engaging the industry on the new scheme”. Following an expression of interest exercise in April, the CPF Board opened a formal call for applications.

Low fees

Sources said offerors are expected to work within an all-in fee cap of 50 basis points, which is described by some as “challenging”.

If so, the portfolios’ total expense ratio (TER) would be even lower than the charges of Central Provident Fund Investment Scheme (CPFIS) digital advisers, and far lower than conventional CPFIS-included funds where the TER cap is 1.75 per cent for higher-risk funds, and 1.55 per cent for medium-risk funds.

Currently, platform and advisory fees are capped at 0.4 per cent. Such fees are likely not allowed for the new glide-path portfolios.

In the effort to keep expenses low, sources said agent bank fees may not apply. This is already the case for CPFIS Special Account (SA) investments, which bypass the requirement for agent banks. Investments using OA funds are subject to agent bank charges.

“The new investment scheme will be a simple and low-cost option designed for long-term investors who are prepared to take some risk for potentially higher returns, but who may have less expertise in navigating the CPFIS offerings or prefer not to actively manage their investments,” said the CPF.

The portfolios’ glide-path mechanism will automatically rebalance members’ asset allocation from higher-risk assets, such as equities, towards lower-risk assets, such as bonds, as they approach their target retirement age. The portfolio will be liquidated in phases by the target date, to mitigate the risk of a sharp downturn at the point of exit.

A source said the fee cap is “absolutely fantastic” for investors, but offerors will have to work within its confines to invest in operational capabilities and compliance, in addition to mounting an ongoing educational and marketing outreach.

UOB and OCBC and some large asset managers declined to comment.

DBS declined to say whether it is participating. However, Calvin Ong, DBS’ head of consumer banking, said CPF’s glide-path portfolios are a “timely addition” complementing the CPF’s interest rates and the CPFIS.

Ong said: “There is still scope to help more Singaporeans invest, strengthen their retirement adequacy, and prepare for longer lifespans... By automatically adjusting risk according to an individual’s life stage... (the portfolios) can help investors stay disciplined through market cycles without having to decide when or how to rebalance their portfolios.”

Some asset managers who are understood to have submitted or participated in proposals manage hundreds of billions of dollars in target-date retirement strategies in mature markets such as the US.

Target-date strategies are similar to the NIS in their use of a glide-path mechanism to adjust risk exposures over time. In the US, target-date strategies hit a total of US$4.8 trillion in assets under management at end-2025, a Morningstar study showed.

Partnering

Endowus and AutoWealth, both digital advisers for CPFIS, are partnering asset managers in their proposals. AutoWealth has partnered Aberdeen as equity manager and Lion Global Investors for fixed income assets in its submission.

Endowus chairman Samuel Rhee said: “We are unable to confirm who and how we are partnering due to confidentiality reasons. But we will continue to be an open platform structure with a selection of best-in-class funds from global and leading local fund managers.”

iFast Financial chief executive Vincent Tong said iFast Singapore is participating in the formal applications submitted by several portfolio managers, serving as their platform partner.

“As CPF investment administrator and a leading wealth platform in Singapore and the region, iFast intends to play a major role in supporting the delivery and long-term success of these investment solutions.”

PhillipCapital executive director Lisa Lee said the most compelling aspect of the life-cycle investment scheme is that it gives CPF members a simpler way to invest for retirement. “This matters because while many Singaporeans recognise the importance of preparing for retirement, knowing where to begin can be cumbersome and staying on course can be difficult.”

She said supporting members in this journey “is where PhillipCapital’s experience can contribute if we are appointed”.

Incorporating advice

A plan design that supports ongoing advice is seen as a key attribute.

Schroders head of product Theron Lam believes the success of any life-cycle investment solution will depend on three factors. These are: simplicity, which helps CPF members understand the investment journey and stay invested; a focus on long-term retirement outcomes; and a deep understanding of the CPF ecosystem, “recognising the unique needs of Singapore investors and the specific requirements of CPF framework”.

Jeik Sohn, head of Singapore and South-east Asia client group at Capital Group, said the CPF’s glide-path portfolios are “a meaningful evolution in strengthening retirement outcomes” for members.

“Retirement preparedness is not just about access to investments but helping people to take action and stay invested through market cycles. Thoughtfully designed target-date solutions can support these objectives by balancing growth and risk over time while keeping investors focused on their long-term goals.”

Endowus’ Rhee said the CPF glide-path portfolios, if well designed, will be able to provide “a lifetime of advice on an individual’s path towards successful preparation for retirement”. The glide path, along with lower costs and access to “great underlying fund components will definitely improve the chances of success”.

AutoWealth chief investment officer Ow Tai Zhi said the firm plans to offer a simple, personalised retirement planning and investment service “that connects the CPF members’ choices in retirement spending goals, investment commitments and risk-return preferences to a good probability of success”.

“The understanding of these connections or trade-offs is paramount to inspire a disciplined investment commitment... to achieve the desired retirement spending goal.”

DBS’ Ong said the bank has “first-mover experience” with a glide-path strategy when it rolled out the DBS Retirement digiPortfolio in 2024. The portfolio adjusts the asset allocation not just in pre-retirement but also in retirement where investors can instruct automatic drawdowns based on retirement income needs.

The number of DBS Retirement digiPortfolio investors grew more than sixfold in 2025. Customers in their late 20s to 30s comprise close to half of all investors in the portfolio.